Canada proposes executive compensation disclosure reforms

The Canadian Securities Administrators (CSA) is proposing reforms to executive compensation disclosure requirements that aim to improve the quality of that disclosure.  The proposals will essentially provide information similar to Australian and the recently implemented US disclosure requirements.

The CSA says that in many areas, they have attempted to articulate requirements in a less prescriptive manner than the US requirements.
The proposed executive compensation form will expand disclosure in key areas. The most significant changes are: introducing, in the summary compensation table, a column showing the total compensation provided to each named executive officer; a new compensation discussion and analysis section; a requirement that all equity compensation in the table be disclosed on the basis of the cost of these awards over the requisite service period, as reflected in a company’s financial statements; more specific disclosure of potential payments to named executive officers upon termination of their position at the company, including more detail on retirement benefits; and expanded disclosure of director compensation, including a summary table and equity disclosure similar to what is required for executives.

The CSA intends the proposed executive compensation form to be in effect at the end of 2007 and will require companies to comply with the new form for financial years ending on or after December 31, 2007.

The comment period is open until June 30.

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